Obama White House excluded Congress from military aid deal with Israel

The Obama administration touted its largest ever $38 billion military aid deal with Israel which was finalized without the input of Congress and is being criticized by Israeli defense contractors.

Sen. Lindsey Graham, South Carolina Republican, said Congress is not bound by the Memorandum of Understanding (MoU) and discounted the suggestion that Congress must follow it to a “T”.

Sen. Lindsey Graham. /AP

“I’m offended that the administration would try to take over the appropriations process,” Graham, who chairs the Senate subcommittee on the foreign affairs budget, said. “We can’t have the executive branch dictating what the legislative branch will do for a decade based on an agreement we are not a party to.”

The $38 billion deal, which will govern the U.S.-Israel defense relationship through 2028, includes supplemental funding for missile defense that Israel received until now outside the MoU framework.

The current MoU, which provided Israel with some $30 billion in military assistance over the last decade, expires in October 2017.

Graham’s spokesman, Kevin Bishop, noted to The Jerusalem Post on Sept. 11 that the senator’s markup had passed through committee in June. The White House was allegedly waiting for Graham to drop his efforts before signing the deal.

“The negotiations were between the Obama administration and the Israeli government – Senator Graham was not part of the negotiations,” said Bishop, noting his boss sees no need to be bound by the administration’s position.

Senior officials in the Obama administration and Israeli Prime Minister Benjamin Netanyahu’s government negotiated for over a year on the new MoU.

Some in the Israeli defense industry were highly critical of the MoU, which is expected to phase out offshore procurement to Israeli defense companies.

“All the money received will need to be spent in the U.S., as opposed to the current situation, in which 26 percent of the annual $3 billion could be converted into shekels and spent in Israel,” The Jerusalem Post reported.

In May, Manufacturer’s Association head Shraga Brosh demanded that Netanyahu veto any deal that would eliminate procurement in Israel.

“The Israeli government’s acceptance of Obama’s plan would be a mortal blow to Israel’s defense manufacturing, and mean the loss of thousands of jobs in Israel in favor of the Americans,” Brosh said at the time.

Even with a higher overall level of defense aid, he said, blocking the government’s ability to spend the money in Israel would cut hundreds of millions of dollars out of the local industry.

The defense industry accounts for about 15 percent of all Israeli manufacturing jobs.

In 2015, Israel’s defense exports amounted to $5.7 billion, around 13 percent of all industrial exports. The loss of American procurement from aid would break up supply lines and technological investment that help the industry flourish, Brosh said.